RAILROAD CONSTRUCTION, PUBLIC AID TO
RAILROAD CONSTRUCTION, PUBLIC AID TO. Public aid to railroad construction in Texas was given because of general benefits to be obtained from increased population, better communication and transportation, and improved contact with the remainder of the country. In 1850 Bexar County and the city of San Antonio took the initiative in such public aid by issuing bonds of $50,000 each to the San Antonio and Mexican Gulf Railway Company. Between 1850 and 1876 Anderson, Brazoria, Galveston, Harrison, Smith, and Walker counties and the cities of Houston, Waco, Dallas, Jefferson, Sherman, McKinney, Henderson, Waxahachie, and Brenham issued bonds totaling $675,000 for the purpose of securing the construction of different railroads. The Constitution of 1876 forbade the future issuance of such local and municipal bonds. In 1852, in the chartering of the Henderson and Burkville Railroad, the state made a grant of eight sections of land for each mile of road constructed, but the amount granted was not sufficient to induce railroad construction. In 1854 the state passed a law that provided sixteen sections of land for each mile constructed, the odd-numbered sections to go to the railroad and the even-numbered sections to the state for school land; thus for each section the railroad received, it had to survey an adjoining section for the schools. Land grants to railroads were prohibited by the Constitution of 1869. The railroads then under construction and expecting to receive land under their charters appealed to the legislature to issue bonds in lieu of the anticipated land. Despite protests of Governor E. J. Davis, the legislature did grant bonds to three lines, but the state comptroller refused to issue them, and his action was upheld by the Texas Supreme Court. A compromise was finally effected with the International-Great Northern Railroad by which twenty sections of land for each mile of track constructed was substituted for the bonds promised it, and the constitution was amended on March 19, 1873, to allow the legislature to aid railroad construction by grants of land not exceeding twenty sections to the mile. The Constitution of 1876 did away with piecemeal grants through individual charters and provided for a general law that would grant sixteen sections to the mile of line constructed; under that constitution 35,777,038 acres were given to railroads, but faulty grants reduced the amount to 32,157,878 acres. Besides bonds and land grants the railroads also borrowed money from the state. Between 1856 and 1860 loans of $1,816,500 were made to roads from the Special School Fund. Principal and interest repaid amounted to $4,271,965. See also RAILROADS, LAND APPROPRIATIONS FOR EDUCATION, LAND GRANTS, LAND GRANTS FOR INTERNAL IMPROVEMENT.
S. G. Reed, "Land Grants and Other Aids to Texas Railroads," Southwestern Historical Quarterly 49 (April 1946).